India IT/ITeS industry to grow at 10.8 p.c in 2009: IDC

NEW DELHI, INDIA: In the backdrop of one of the worst ever global financial and economic meltdowns, IT advisory firm IDC estimates that in 2009, the overall India IT/ ITeS industry is expected to grow at 10.8 percent, the slowest in the last five years to touch Rs 3,09,573 crore.

The domestic market is estimated to grow at 10.2 percent, to touch Rs 1,09,406 crore and at the same time, exports are expected to grow at 11.2 per cent to cross Rs 2,00,000 crore.

The India IT and ITeS industry crossed Rs 2,79,000 crore in 2008, which translates into a growth rate of 14.4 percent year-on-year (2008 over 2007).

Going forward, the overall India IT/ITeS industry is expected to grow at 13.9 percent (CAGR 2008-13) to touch Rs 534,479 crore in 2013; with the domestic market growing at a slightly higher 15.8 percent as against exports growth of 12.7% for the same period.

These projections were made available by IDC India on the occasion of the launch of their annual briefing session for the ICT industry, Directions.

“Though there are certain signs of a revival happening in the domestic arena, the spending may not begin to increase just yet. IT spending behaviour would remain conservative throughout 2009 due to uncertainty in the economic environment. The hardware market will remain under pressure through the year, while the software and IT services markets will also be affected, though to a comparatively lesser extent”, IDC India Country Manager Kapil Dev Singh said.

“The share of IT Services and IT-enabled Services (ITeS) in the India domestic market is expected to rise from 31.7 percent in 2008 to 41.9 percent in 2013, signalling the increasing focus of enterprises to ‘leverage’ the capacities built-up,” added Singh.

The domestic IT and ITeS market growth projection for the period 2008-13 is expected to moderate to 15.8 percent, as against the average annual growth of 25 percent recorded during 2003-08. This signals the onset of a new phase of growth, Growth Phase 2.0. This phase of growth will see IT vendors helping enterprises design and deliver ‘new age’ services to their customers by leveraging the existing IT infrastructure.

Increasingly, the ICT vendor community is expected to offer innovative products and solutions, which will be fundamentally different from the past in the way they are delivered and/or consumed. These shifts and changes in the Technology-Product-Market landscape will be further shaped by the economic recovery through 2009-10 and is expected to build up in ‘2010 and beyond’, said IDC.